Westpac Leading Index for Australia indicates that the nation’s growth outlook remains subdued. The index inched up marginally from -0.56% to -0.50% in August, marking a year since it began registering negative readings. These figures suggest that the prospect of per capita GDP advancing in the coming 3–9 months appears bleak.
Westpac’s forecasts for the next year resonate with the index’s gloomy narrative, anticipating an economic growth of less than 1% for the year leading up to June 2024. Interestingly, there’s a potential silver lining: with predictions pointing to population growth surpassing 2% in 2023, this could introduce some upside risks to the otherwise somber economic projections.
However, despite this population surge, the economy is projected to trail behind, as evident from the March and June quarter results. Both quarters witnessed a contraction of -0.3% in GDP per capita, a pattern that’s predicted to persist in the forthcoming year.
Regarding next RBA rate decision on October 3, Westpac said it’s “almost certain to hold rates steady for another month”. The crucial data for the next move would be September quarter inflation report, which will not be available until the November RBA meeting.
